Co-op Bank of Kenya grew its net income 53 percent in the year ended December, helped by higher interest income from lending and investment in government fixed-income securities.
The lender’s net profit in the review period stood at Sh16.5 billion, up from Sh10.8 billion a year earlier.
Co-op Bank declared a dividend of Sh1 per share or a total of Sh5.86 billion which will be paid on June 17 to shareholders on the May 30 register.
The payout is the same as for the previous two years when other listed banks suspended or slashed dividends, citing increased economic uncertainty brought by the Covid-19 pandemic.
Most of the lenders have reinstated or raised dividends in the review period, with Standard Chartered Bank Kenya making its highest-ever payout of Sh19 per share or an aggregate of Sh7.1 billion.
Co-op Bank’s earnings growth rode on a 14 percent increase in total interest income to Sh55.6 billion as the loan book and investment in government securities expanded 8.2 percent and 13.6 percent to Sh310.1 billion and Sh184 billion respectively.
Non-interest income, including fees and commissions, increased by Sh1.9 billion to Sh19.3 billion, contributing to the bottom-line.
The bank also benefitted from lower costs, with interest expenses shrinking by Sh2.1 billion to Sh14.6 billion. This was despite deposits rising 29 percent to Sh407 billion, indicating a reduction in interest rates or an increase in non-interest-bearing accounts.
Chief executive Gideon Muriuki said the newly acquired subsidiary, Kingdom Bank, made a positive contribution to the consolidated earnings.
Kingdom Bank, which previously traded as Jamii Bora Bank, posted a net income of Sh497.7 million in the review period, emerging from a net loss of Sh10.1 million the year before.
Co-op Bank acquired a 90 percent stake in the subsidiary in August 2020 for Sh1 billion in a rescue deal after the original shareholders balked at providing additional capital to the institution which was in losses.
The acquisition was part of Co-op Bank’s strategy of growing in the Kenyan market where it believes opportunities are yet to be exhausted.
The bank’s only foreign operation is in South Sudan. Co-op Bank has been funding its growth through retained earnings, with its latest dividend declaration leaving it with a Sh10.6 billion war chest.
The lender is opening seven new branches in the country this year, a move that will raise its total distribution network to 200.
